View full sizeHoward Birdsall, 69, of Brielle, who retired last year as the chief executive officer of Birdsall Services Group, was indicted Tuesday along with six other executives and shareholders for conspiring to circumvent the state's pay-to-play law.N.J. Attorney General's Office

TRENTON — The state attorney general seized the assets of one of New Jersey’s largest engineering firms, Birdsall Services Group, at the same time the company and seven executives were indicted, The Star-Ledger learned today, possibly derailing or delaying hundreds of public projects.

Under a court order signed Tuesday by Superior Court Judge Lawrence Lawson in Monmouth County, the state Attorney General’s Office temporarily took possession of all of the company’s holdings, including two Bank of America accounts.

Two sources familiar with the order said it was unclear if the state would allow the company to operate in some form, like paying its approximately 350 employees or continuing work on the myriad projects it is under contract to complete. The sources requested anonymity because negotiations are continuing between the state and the company.

The attorney for Birdsall, Joseph Hayden Jr., said in a statement that the company is "confident that we will be able to resolve this financial matter and continue to serve our clients at the same level of professionalism they have come to expect."

Some municipal officials fear work could grind to a halt if talks between the state and company break down.

"I don’t know why the state would move toward civil forfeiture and risk the completion of a lot of good projects statewide," said Mayor Christian Bollwage of Elizabeth, which has several contracts with Birdsall. "This forces mayors into a difficult position. Why would the state do that?"

The Eatontown-based company as well as seven current and former executives and shareholders, including the retired chief executive, Howard Birdsall, were indicted for illegally financing the campaigns of the same public officials who have awarded them millions of dollars in public contracts.

State authorities charge that over six years, the company and its senior executives disguised more than $686,000 in contributions by asking employees to write checks of $300 or less, which do not have to be reported to the state, and then illegally reimbursing them through added bonuses.

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The company received more than $28 million in public contracts in 2011 — including projects in Essex, Union, Somerset, Morris and Middlesex counties — and $86.7 million since the start of 2008, according to disclosure reports filed with the state Election Law Enforcement Commission. (See a full list of 2011 projects below.)

Authorities have declined to say which elected officials or political groups received the contributions, citing the continuing investigation.

Criminal defense attorneys and campaign finance experts said the severity of the charges and prison terms, which could run 10 to 20 years, might persuade some of the defendants to cooperate and implicate elected officials.

But the experts cautioned that cases against the officials could be hard to prove because contractors and politicians often have an implicit understanding about campaign cash and public contracts.

"They know where the money is going, where the money is from and what it’s for," said Bill Schluter, a former Republican state senator who helped draft the state’s first lobbying and financial disclosure laws. "They don’t have to have a quid pro quo. It’s a wink and a nod."

If the company itself pleads guilty or is convicted, it will probably be banned from public contracts for some time, if not permanently, said Alan Zegas, a prominent defense attorney in the state. But, Zegas added, prosecutors may consider the affect on municipalities where projects are in progress.

"Where there’s going to be an adverse effect, for example, if the state benefits from tax revenues or people could be put out of employment if the company were prohibited to do business, those kinds of considerations are taken into account by the government," Zegas said.

He added that most public contracts include a provision that the company will abide by the law, so any admission of guilt or a conviction would constitute a breach of contract and allow elected officials to back out of the agreement.